What makes British Gen Zers spend on luxury?
By Nicolas Lopez, consumer behavioral analyst at Canvas8.
Gen Zers (born 1997-2010) have a reputation for their love of luxury. But in the era of “stealth wealth,” what are they really looking for?
Prolonged economic woes are affecting the luxury market, no matter how high-end. Luxury and designer brands saw a 7% drop in spending last year, while the number of transactions dropped 10%. In addition, 59% of consumers are currently looking to spend less on luxury goods, which portends a shift in how shoppers decide to splurge. Despite the raging cost of living crisis, Gen Zers have long had a reputation for driving luxury sales forward. Keen to invest in high-end goods and splurge on $20 smoothies from Erewhon grocery store, what drives their dedication to indulgent spending?
In the last few years, we’ve seen HNWIs rejecting early-2010’s “flex culture” for subtler visual cues that celebrate an in-the-know status. While “quiet luxury” isn’t so quiet anymore, quality of tailoring and materials are taking center stage (even in basics, like Loro Piana’s $625 plain baseball cap). Aspirational luxury buyers prioritize durability and resale value in the purchases they save up for, looking at big buys as an investment in their social status. As dupe culture emerges to offer an affordable alternative to big buys, many are turning to little luxuries to produce the same satisfaction at a lower price point.
Although the cost of living crisis is nothing new, this prolonged economic contraction stands to make long-term changes in the values that speak to luxury shoppers.
So, what’s driving Gen Z’s love for luxury?
So used to economic instability, British Gen Zers want to invest in luxuries that last. They want to make sure their purchases will still be in their closets 5–10 years from now. They believe that a high price point is connected to better quality and durability. Particular attention is paid to the craftsmanship of high-quality items, as it ensures longevity and reduces the need for frequent replacements, as well as timeless design and aesthetics which embody elegance and the enduring aesthetics that they are proud to own.
Due to the persistent crisis around the cost of living, Gen Z luxury shoppers enjoy big purchases less frequently. They also want each experience to feel celebratory. Luxury can be something that is more exclusive long term, something that creates conversation. Gen Zers need a long-term experience from their purchase, something that isn’t easily forgotten. This is equally true for high-end vacations, like Accor’s Orient Express, which uses the glamour of 1960s Italy to make travel feel like a destination itself. Similarly, retailers like Harrods and Selfridges are focusing on retooling the in-store shopping experience to make the act of luxury purchasing feel like an event.
Quality in the details
The growing prominence of de-influencing and the ability to call out underperforming brands on social media and the growing desire to see luxury purchases as an investment are driving luxury shoppers’ standards to rise. Gen Zers are used to discovering potential purchases from social media, with 84% acting on their spending desires. Still, it’s riskier than ever for luxury brands to cut corners. Attention to detail is important. Intractable details that not many would notice unless they took a close look are necessary. Highlighting the small details that make these products unique is key to winning loyalty from luxury shoppers.
Usually, luxury brand advertisements are flashy, but it’s often more useful to spotlight backstory about the products. Services like Curated Loop allow fashionistas to rent clothes first before buying them. This lets potential buyers ensure the quality of what they’d be buying. Similarly, the growing popularity of replica handbags signals that some shoppers are more concerned with craftsmanship than authenticity.